Wednesday, 6 February 2013

Since July 2012 the unemployment rate
in Tampa has fallen from 9.4% to 7.9% in December and is now in line with
national averages. Having come back from a high of 12.5% in 2011, the area
carries impressive momentum into the new year.

A better measure of economic activity
is the simple employment number, cut adrift of the percentage of people looking
for work. The graph below shows Tampa employment through the entire cycle from
2002 to present. After being literally decimated in 2010 employment has
recovered impressively. More people are employed in Tampa now than during the
majority of the “bubble” up to ’06. Only during the height of employment in ’07
were things any better and the current number is rapidly approaching those
levels. The rate of employment growth coming out of the trough is also
superior.

Contrast the median house price from
2000 to present below. Prices started to come off at the same time as employment
but took longer to find bottom in early 2011. Since that time they have steadily
recovered to early 2003 levels. The employment chart reveals that there are a
lot more people working in Tampa then there were in 2003 (or 2004, 2005 or most
of 2006). Mortgages, although cheaper are harder to qualify for, but many
people also are forced or prefer to rent, still feeling the effects of the
crash.

It is also noteworthy that this revival in
employment has occurred almost entirely without the construction sector which continues
to suffer. While we saw a surprising amount of new homes being built in
November of 2012, the sector employment data below paints a different picture
(Construction Sector Tampa Employment: Bureau of Labour Statistics).

Construction is a significant sector of the economy. Even
with the building activity we saw, Tampa has not yet returned to the “virtuous
cycle” in which construction activity itself contributes to employment and
house price growth. The sharply declining inventories of available homes
however bode well for an imminent return.

If the economy has been growing as it has without the
construction industry, one can only imagine what happens when it kicks in.